DETROIT – Kemet, a leading manufacturer of capacitors for use in the auto industry, is stabilizing its tantalum supply chain through vertical integration, as it increases mining in Africa to keep up with increased demand.
The company says its goal is to eliminate the complexity and uncertainty of both supply and raw-material price fluctuations.
Tantalum is a refractory metal with unique electrical, chemical and physical properties that is used mostly as a powder in the production of electronic components, mainly capacitors.
Kemet, based in Greenville, SC, says only about 21% of its tantalum-powder production goes to automotive clients. But that’s growing as consumer trends gradually change, Product Manager Stanley Garrett tells media during a supplier event here.
Tantalum can provide more voltage with a smaller footprint than aluminum or ceramic materials, Garrett says, and Kemet is actively courting hybrid- and electric-vehicle makers as a result.
He estimates roughly 80% of automotive applications, particularly telematics, use tantalum, but the computer and telecommunications industries remain the supplier’s biggest clients for now.
However, an increase in recent automotive business pushed Kemet to open a regional sales and engineering office in Novi, MI, in 2011. The company’s major Tier 1 customers include, , , Lear, Magneti Marelli, TRW and Visteon.
To enhance its supply-chain strategy, Kemet last year secured “conflict-free” (an international tracking-and-traceability program) mining rights for tantalum ore in Katanga province located in the Democratic Republic of Congo. Garrett says his company now brokers tantalum directly to its buyers, rather than working with middlemen.
Its recent acquisition of a tantalum powder-manufacturing facility in Carson City, NV, known as Kemet Blue Powder, makes it the largest tantalum distributor in the world.
“It really cuts that lead time in half. You basically control your own destiny,” Garrett says.
Tantalum is mined in Australia, Brazil, China and Canada, but Kemet chose the DRC because it is found on the surface there, thus eliminating the need for excess heavy machinery. There is no concern over political strife, Garrett says. “That area of the Congo is relatively stable.”
As part of the company’s comprehensive plan to boost the social and economic environment around the mine, Kemet is investing $1.5 million in a nearby village in the DRC of about 10,000 residents by building schools, a medical clinic, fresh-water wells and other infrastructure.